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can the FCA deliver on its promise of smoother processes?

8 April 2016
The FCA has come under attack for authorisation delays and failures to take enforcement action because of tight resources, and meanwhile it is cutting staff. 

Heads of peer-to-peer lending platforms criticised the regulator for their handling of this week’s Innovative Finance ISA launch, with only a handful approved in time to offer the new ISA. The delays have been attributed to the huge influx of work for the FCA’s authorisations department when it took over consumer credit regulation. The FCA took on nearly 300 extra staff over the last two years to handle these new authorisations, but is now beginning to scale back, announcing staff cuts this week. 

Issues have also been raised about the FCA’s selective approach to enforcement actions, with the European Securities and Markets Authority noting that the FCA is highly professional but limited resources mean it can only focus on a small proportion of the market. One P2P platform founder said that the FCA was “doing its best” but “has been dealt an impossible task.”

The new Regulatory Sandbox opening on 9 May 2016 will be another draw on the regulator’s resources. In November, Steve Woolard, who is heading up the FCA's Project Innovate, said it would create, “a smoother process end-to-end for new entrant firms. Not just initial advice, but all the way through authorisation.” Whether it can live up to this promise remains to be seen.

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